In what was partly a protest at Mr Barak's approach to making peace with the Palestinians, the Knesset appointed Moshe Katzav, a Likud stalwart, to the presidency in a stunning upset.

The 76-year-old Mr Peres was widely expected to win the largely ceremonial post, crowning a 41-year career in politics in which he was twice premier, held most of the top cabinet portfolios, was signatory to the controversial 1993 Oslo peace accords, and was seen as one of the founders of the state itself.

But, despite his international stature and dazzling CV, he lost to Mr Katzav - an established figure in Israel, but a nobody abroad - in the first of two secret ballots. The 63-57 vote shocked both the parliament itself, and the country at large - although there had been a foretaste in the first ballot, which Mr Katzav won but fell one vote short of the 61 required to win.

The result is a serious humiliation for Mr Barak and his One Israel bloc. He has returned from the Camp David summit to face a wall of right-wing anger over what his foes perceive to be his dangerous "concessions" to Yasser Arafat, including an apparent willingness to accept the concept of dividing Jerusalem.

Before he left for the United States three weeks ago, his coalition government fell apart when three right wing and religious parties left, again over the peace talks.

Now, with his Foreign Minister David Levy threatening today to join a long list of other cabinet members who have quit, his position is even weaker.

Last night, the Prime Minister - a former army general who has never learned the black art of handling Israel's parliament - was left to console himself with his survival in two no-confidence votes.

For the second time in less than a month, he technically lost one of them, getting fewer votes than his foes. But the 53-48 result missed the overall majority of the 120-member Knesset needed to topple the government. He fared marginally better in the other vote, which split 50 votes to 50.

Although Mr Peres is a controversial figure, with a reputation for devious political manoueverings, polls suggested he was the man favoured by Israelis on the street - as opposed to in their temperamental and feral parliament.

A crucial factor in his defeat was the decision of the ultra-Orthodox Shas party to back Mr Katzav because, like the core of their voters, he is Sephardic (a Jew from the Middle East or north Africa).

The outcome was a kick in the teeth for secular Israel, which has long balked at the excessive power of the ultra-Orthodox parties and the rabbis who dictate their actions.

Professor Yaron Ezrahi, a leading political analyst, said: "The secular Ashkenazi (European) sector in Israeli society - who are about half - is going to take it very hard. It is shocking insult to one of the icons, one of the founders of the state. The man is so incredibly superior by any measure to Katzav. It will be considered a brutal insult.

"There is a sense of the ultra-Orthodox taking over and controlling legislation," he said. "That is going to deepen the secular-religious, Azhkenazi-Sephardi rift," he said.

Before the no-confidence vote, Mr Barak appealed to the Knesset to back him in his mission to hammer out a Middle East peace deal, the central plank of his election platform last year. "I turn today to each and every one of you and ask you to rise above the petty politics and the conflicts and ... unite around the government in order to lead Israel to peace and to a secure future for the children."

The leader of Likud, Ariel Sharon, accusing Mr Barak of returning from Camp David without a deal, but having set "a dangerous precedent" for Israel's future.

There is, finally, some relief on the horizon for Mr Barak and what is left of his government. The vote was the parliament's last chance to topple them before the Knesset's summer recess begins on Sunday. He then has three months to try to piece together his coalition, before the hawks gather anew. Or, perhaps one should say, vultures.